25 November 2020
Jonathan Djanogly welcomes Japan trade deal but calls for more Parliamentary scrutiny

Jonathan Djanogly welcomes the trade agreement with Japan but calls for more UK Parliamentary scrutiny noting that the deal had to be ​approved by a vote in the Japanese Parliament, but not in the UK.

Mr Jonathan Djanogly (Huntingdon) (Con)

Accounting for 2% of UK total exports in 2018, Japan is the UK’s fourth largest export market. By size alone, it is an important one for this country to have secured an FTA with, and our Ministers are to be congratulated on that achievement. However, it is important that consideration is given to what constitutes success or levels of success when looking at this deal, against which later deals will be judged. Do we measure success by jobs secured or jobs to be gained, by tariffs saved or regulations avoided—or is it political, defence or strategic gains, all of which can directly or indirectly come out of a trade deal? In this regard, I have seen reports that complain that the Government have, for the most part, only got the same as the existing EU deal with Japan; the Opposition also said that earlier. That is somewhat harsh, as the Government’s stated objective was to roll over existing EU FTAs. If they have done so, in my book they have met their objective.

Having said that, we still need to understand and set out the parameters for future FTA measurements of success. The speed of negotiations with Japan has been frenetic. We should look again at the timetable and learn whether we can make improvements on the timing of future FTA talks, including for scrutiny purposes. I would be interested to hear whether the Minister thinks that more could have been achieved at this stage with more time.

I declare any interest that I may have as a non-practising solicitor, but it is clear that recognition of professional qualifications with Japan has simply failed to happen in the way in which services’ representative organisations had asked for. Will this now be addressed, or will services continue to be treated as the poor relation of manufacturing as we progress with other FTAs? Given that services account for 51% of our trade with Japan, this is an important issue.

The Government have stated their intention that this Japan FTA should act as a stepping stone to the UK acceding to the comprehensive and progressive agreement for trans-Pacific partnership. With 13.5% of global GDP and 495 million consumers, this clearly is a big deal. Of course, the CPTPP’s predecessor was the trans-Pacific partnership, which was partly a US-inspired effort to marginalise China in the Pacific region. The US then withdrew from the TPP, and seemingly now may be replaced by China. This clearly raises many political, as well as trade, questions. I think that the Government will need to set out their case here at the earliest opportunity. How is this likely to affect our US FTA negotiations? How will we deal with regulatory issues such as the US-based agriculture regulations, which the CPTPP follows? Could this be a rare opportunity to create a new set of rules with China, such as on treatment of state-owned enterprises, and how does this impact on other CPTPP members that have varying levels of issues with China in trade, as well as security concerns?

Let me finish by heading back to the important issue of scrutiny, process and approval. The Minister will know full well my amendment to the Trade Bill requesting parliamentary approval for FTAs between agreement and signature. We can go through any processes we like, but the bottom line is that this Japan deal had to be ​approved by a vote in the Japanese Parliament, and that is not the case in the UK. A version of my amendment is currently in the other place, and I wish it well.

A further set of Trade Bill amendments is aimed at modernising the antiquated CRaG system, which currently enables, but does not demand, votes on treaty ratification. CRaG does not allow Parliament to stop a treaty as Ministers have previously suggested, but only to delay ratification for 21 days at a time. I note that the Government maintain that the speed of the Japan negotiations did not allow regular updates to Parliament via written ministerial statement. I also note that the EU Committee in the other place has suggested a process for the sharing of FTA documents before laying them formally. Is the Minister going to accept this common-sense proposal? Likewise, there have been some very late stage letters—sent, I think, in October—from the Secretary of State to Lord Goldsmith and the International Trade Committee setting out a proposed scrutiny system process. Clearly, more needs to be done in this area and it would be good to hear the Minister’s comments on that this evening, but I would not wish to detract from the importance of this deal to the UK and the further opportunities that it will open for us looking forward.